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Do Cities in California Have to Plan for New Housing?
Posted on 09/26/2019

An intro to California's Regional Housing Needs Assessment (RHNA) Requirements

California is in the midst of a housing shortage.

Since 1970, the gap between the number of California residents and the amount of available homes has been growing steadily, resulting in a shortfall of affordable options, especially in the Bay Area.

To meet projected population and household growth, the California Department of Housing and Community Development (HCD) has identified a need for 1.8 million new homes between 2015-25.

For years, job growth has outpaced construction—meaning more demand for housing, and not enough supply. Developers typically build homes that sell at market rate, so affordable homes are harder to come by.

 

What's "Affordable"?

In California Housing terms, “affordability” is divided into five levels, which relate to a city or county’s Area Median Income (AMI):

Extremely Low 0-30% AMI
Very Low 31-50% AMI
Low 51-80% AMI
Moderate 81-120% AMI
Above Moderate 120%> AMI

In Contra Costa County, the 2019 Area Median Income for a family of 4 is $111,700.

 

Contra Costa County Income Categories, based on Area Median Income (2019):

Income Categories California 

Within this framework, a Paramedic ($45,479), Dental Assistant ($47,580), or First-Year Teacher with a Master’s Degree ($55,667) fall into the “Low Income” bracket; a Restaurant Cook ($33,128), Landscaping Worker ($40,788), or Retail Salesperson ($32,938) fall into “Very Low Income.”

What Laws Require New Housing to be Built?

In order to address the growing housing need, the State of California requires each city or county (“jurisdiction”) to plan for new housing for all income levels.

The process that determines how much housing a community must plan for is called the Regional Housing Need Allocation, or RHNA (often pronounced “REE-nah)”. Every 8 years, Bay Area regional housing needs are identified by the California Department of Housing and Community Development (HCD). Then, jurisdictions are assigned the number of new homes they must plan for by the Association of Bay Area Governments (ABAG).

To determine how many homes to assign to each jurisdiction during the 2015-2023 cycle, ABAG took into account a number of factors, including existing transit connections, projected employment, area median income, commuter demographics, housing values, and sustainability.

ABAG takes into account the Bay Area’s existing Priority Development Areas, and Priority Conservation Areas that have been identified within the “sustainable growth” framework.

  • Priority Development Areas are “existing neighborhoods near transit nominated by local jurisdictions as appropriate places to concentrate future growth”.
  • Priority Conservation Areas are “regionally significant open spaces for which there exists broad consensus for long-term protection, but which face nearer-term development pressures”.

Sustainability is also a factor in assessing the impact of new housing. “The California Sustainable Communities and Climate Protection Act of 2008”, or California Senate Bill 375 (SB 375) sets a goal of reducing statewide greenhouse gas emissions by 7% per capita by 2020 and 15% per capita by 2035.

To meet these targets, SB 375 “requires that the Sustainable Communities Strategy (SCS) promote compact, mixed-use commercial and residential development… [and] directs more future development in areas that are or will be walkable and bikeable and close to public transit, jobs, schools, shopping, parks, recreation, and other amenities”.

How Does This Impact San Ramon?

For the 2015-2023 cycle, the City of San Ramon is required to plan for 1,417 units of additional housing at the following levels:

San Ramon RHNA Allocation 2015–23 by Income Level

Very Low (up to 50% of Area Median Income)
516
Low 279
Moderate 282
Above Moderate 340
Total
1,417



What Happens If a City Doesn’t Meet Its RHNA Numbers?

In 2017, the State of California passed 15 bills, also known as the Housing Package, to address the State’s housing crisis. Alongside increased incentives and funding for constructing new homes in lower income categories, these bills introduced stricter penalties for cities or counties that don’t fulfill their RHNA numbers.

If a jurisdiction fails to plan for its assigned housing needs:

Within this framework, California cities must update the Housing Element of their General Plans every cycle in order to identify where new housing at the required levels will best fit into the community. 

 

Further Reading:

 

Want to hear more about this topic from City Hall, or have another question?

Submit your #AskCityHall question by calling 925.973.2500, emailing communications@sanramon.ca.gov, or mailing a question to us at Ask City Hall, City Manager’s Office, 7000 Bollinger Canyon Road, San Ramon CA 94583